Hooray for AIG. Only a 2.4B loss. Break out the champagne…..its bonus time!
I’m not good with math so perhaps someone smarter than myself can help me out here. If AIG loses 2.4b, how long will it take to pay back the taxpayer bailouts?
According to the Fed, we’re only going to lose 5 billion on this one. We can all sleep better at night knowing the fed would never lie.
While AIG looks to exit government ownership, here are some insights.
a) The company looks to pay off money it received from the federal government by selling off business units. By selling off key business units (i.e. Hartford Steam Boiler, Asian Life Insurance operations), how will the company be able to thrive when some of its largest profit centers are gone?
b) The company has a current combined ratio of 99.3%. The article does not take into effect that other competitors have lower loss ratio and combined ratios than Chartis. This means that the insurance operations are not running as effectively and profitably as their competition.
c) Also, the company has had adverse loss reserve development of approximately $208 million. Some of the long tail claims written by Chartis’ companies are coming back to negatively impact the company’s profitability.
In short, the company (when excluding the Fuji Insurance merger), saw a decline in premium. This is totally understandable as the company had unprofitable business on their books that they had either to: (1) raise rates dramatically or (2) exit the line of business.
With some operating divisions trying to raise rates and/or shed unprofitable lines of business, property/casualty companies that have been more profitable and efficient than AIG will continue to erode the company’s position in the insurance marketplace.
While the thoughts of exiting government ownership might sound great, things aren’t so peachy for the business divisions of AIG….
Hooray for AIG. Only a 2.4B loss. Break out the champagne…..its bonus time!
I’m not good with math so perhaps someone smarter than myself can help me out here. If AIG loses 2.4b, how long will it take to pay back the taxpayer bailouts?
According to the Fed, we’re only going to lose 5 billion on this one. We can all sleep better at night knowing the fed would never lie.
Solid turnaround over there!
Joker….really?
Thanks
Perhaps I should have posted that under the name “ROSIE”
Did you even read the article, Joker?
While AIG looks to exit government ownership, here are some insights.
a) The company looks to pay off money it received from the federal government by selling off business units. By selling off key business units (i.e. Hartford Steam Boiler, Asian Life Insurance operations), how will the company be able to thrive when some of its largest profit centers are gone?
b) The company has a current combined ratio of 99.3%. The article does not take into effect that other competitors have lower loss ratio and combined ratios than Chartis. This means that the insurance operations are not running as effectively and profitably as their competition.
c) Also, the company has had adverse loss reserve development of approximately $208 million. Some of the long tail claims written by Chartis’ companies are coming back to negatively impact the company’s profitability.
In short, the company (when excluding the Fuji Insurance merger), saw a decline in premium. This is totally understandable as the company had unprofitable business on their books that they had either to: (1) raise rates dramatically or (2) exit the line of business.
With some operating divisions trying to raise rates and/or shed unprofitable lines of business, property/casualty companies that have been more profitable and efficient than AIG will continue to erode the company’s position in the insurance marketplace.
While the thoughts of exiting government ownership might sound great, things aren’t so peachy for the business divisions of AIG….
It’s called sarcasm fellas.
A massive layoff took place at Chartis insurance today–1400 people across the company.
Explanation?